{"id":1545,"date":"2025-05-20T19:21:06","date_gmt":"2025-05-20T19:21:06","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/?post_type=chapter&#038;p=1545"},"modified":"2025-07-16T22:42:25","modified_gmt":"2025-07-16T22:42:25","slug":"understanding-decision-making","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/chapter\/understanding-decision-making\/","title":{"raw":"Understanding Decision-Making","rendered":"Understanding Decision-Making"},"content":{"raw":"<div class=\"textbox textbox--learning-objectives\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">Learning Objectives<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n\r\nBy the end of this section, you should be able to:\r\n<ul>\r\n \t<li>Define decision-making.<\/li>\r\n \t<li>Understand different types of decisions.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>\r\n<strong>[pb_glossary id=\"2311\"]Decision-making[\/pb_glossary]<\/strong> refers to choosing alternative courses of action, which may also include inaction. At the same time, it can be argued that management involves decision-making; half of the decisions managers make within organizations ultimately fail (Ireland &amp; Miller, 2004; Nutt, 2002, 1999). Therefore, increasing one's effectiveness in decision-making is crucial to maximizing overall work performance.\r\n\r\nThis chapter will help you understand how to make decisions, both alone and in a group, while avoiding common pitfalls. Individuals throughout organizations use the information they gather to make a wide range of decisions. These decisions can have a profound impact on the lives of others and significantly alter the course of an organization. For example, the decisions made by executives and consulting firms at Enron ultimately resulted in a $60 billion loss for investors, thousands of employees losing their jobs, and the loss of all employee retirement funds. However, Sherron Watkins, a former Enron employee and now-famous whistleblower, uncovered the accounting problems and tried to enact change. Similarly, the decision by firms to trade in mortgage-backed securities is hurting the entire U.S. economy. All parties involved in such outcomes made a decision, and everyone is now living with the consequences of those decisions.\r\n<div id=\"section_1\" class=\"mt-section\">\r\n<h2 class=\"editable\">Types of Decisions<\/h2>\r\n<div class=\"epigraph block\">\r\n\r\nMost discussions of decision making assume that only senior executives make decisions or that only senior executives\u2019 decisions matter. This is a dangerous mistake.\r\n<p class=\"indent attribution\">Peter Drucker<\/p>\r\n\r\n<\/div>\r\nDespite the far-reaching decisions in the previous example, not all have significant consequences or require much thought. For instance, before you come to class, you make habitual and straightforward decisions such as what to wear, what to eat, and which route to take to and from home and school. You probably do not spend much time on these mundane decisions. These straightforward decisions are termed <strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2313\"]programmed decisions[\/pb_glossary]<\/a><\/span><\/strong>, which occur frequently enough that we develop an automated response to them. The computerized response we use to make these decisions is called the <strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2314\"]decision rule[\/pb_glossary]<\/a><\/span><\/strong>. For example, many restaurants routinely face customer complaints as part of their business. Because complaints are a recurring problem, responding to them may become a programmed decision. The restaurant might enact a policy stating that every time they receive a valid customer complaint, they should receive a free dessert, representing a decision rule.\r\n<figure>\r\n\r\n[caption id=\"\" align=\"aligncenter\" width=\"300\"]<img class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19577\/3a52480920291de027f1daf98c65a928.jpg?revision=1\" alt=\"Image of McDonalds which uses standardized recipes for consistency around the globe. \" width=\"300\" height=\"225\" \/> Figure 6.2.1 To ensure consistency around the globe, such as at this St. Petersburg, Russia, location, McDonald\u2019s Corporation trains all restaurant managers at Hamburger University. There, they take the equivalent of two years of college courses and learn how to make decisions on the job. The curriculum is taught in 28 languages. Wikimedia Commons\u2014public domain.[\/caption]\r\n\r\n<figcaption><\/figcaption><\/figure>\r\nOn the other hand, unique and essential decisions require conscious thinking, information gathering, and careful consideration of alternatives. These are called <strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2316\"]nonprogrammed decisions[\/pb_glossary]<\/a><\/span><\/strong>. For example, in 2005, McDonald\u2019s Corporation became aware of the need to respond to growing customer concerns regarding the unhealthy aspects (high in fat and calories) of the food they sell. This is a non-programmed decision because, for several decades, customers of fast-food restaurants have been more concerned with the taste and price of the food than its health implications. In response to this problem, McDonald\u2019s decided to offer healthier alternatives, such as substituting French fries in Happy Meals with apple slices. In 2007, they also banned the use of trans fat at their restaurants.\r\n\r\nA crisis also constitutes a nonprogrammed decision for companies. For example, the leadership of Nutrorim was facing a tough decision. They had recently introduced a new product, ChargeUp with Lipitrene, an improved version of their popular sports drink powder, ChargeUp. At some point, a phone call came from a state health department to inform them of 11 cases of gastrointestinal distress that might be related to their product, which led to a decision to recall ChargeUp. The decision was made without an investigation of the information. While this decision was conservative, it was made without a process that weighed the information. Two weeks later, it became clear that the reported health problems were unrelated to Nutrorim\u2019s product. All the cases were traced back to a contaminated juice bar at a health club. However, damage to the brand and the balance sheets had already been done. This unfortunate decision prompted Nutrorim to reassess its approach to decision-making under pressure. The company now gathers information to make informed choices even when time is of the essence (Garvin, 2006).\r\n\r\nDecisions can be classified into three categories based on the level at which they occur.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2317\"]Strategic decisions[\/pb_glossary]<\/a><\/span><\/strong>\u00a0set the course of an organization.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2318\"]Tactical decisions[\/pb_glossary]<\/a><\/span><\/strong>\u00a0are decisions about how things will get done. Finally,\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2319\"]operational decisions[\/pb_glossary]<\/a><\/span><\/strong> refer to employees' daily decisions to make the organization run. For example, consider the restaurant offering a free dessert when a customer complaint is received. The restaurant owner made a strategic decision to have excellent customer service. The restaurant manager implemented a free dessert policy as a way to address customer complaints, a tactical decision. Finally, the restaurant servers make individual decisions each day by evaluating whether each customer complaint received is legitimate and warrants a free dessert.\r\n\r\n<em><span class=\"title-prefix\">Figure 6.2.2<\/span>\u00a0Examples of Decisions Commonly Made Within Organizations<\/em>\r\n<table class=\"mt-responsive-table\">\r\n<tbody>\r\n<tr>\r\n<th>Level of Decision<\/th>\r\n<th>Examples of Decision<\/th>\r\n<th>Who Typically Makes Decisions<\/th>\r\n<\/tr>\r\n<tr>\r\n<td>Strategic Decisions<\/td>\r\n<td>Should we merge with another company?\r\nShould we pursue a new product line?\r\nShould we downsize our organization?<\/td>\r\n<td>Top Management Teams, CEOs, and Boards of Directors<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Tactical Decisions<\/td>\r\n<td>What can we do to help facilitate collaboration between employees from the two companies?\r\nHow should we market the new product line?\r\nWho should be let go when we downsize?<\/td>\r\n<td>Managers<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Operational Decisions<\/td>\r\n<td>How often should I communicate with my new coworkers?\r\nWhat should I say to customers about our new product?\r\nHow will I balance my new work demands?<\/td>\r\n<td>Employees throughout the organization<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nIn this section, we will discuss different decision-making models designed to understand and evaluate the effectiveness of nonprogrammed decisions. We will cover four approaches: the rational decision-making model, the bounded rationality decision-making model, the intuitive decision-making model, and the creative decision-making model.\r\n\r\n<\/div>\r\n<div id=\"section_2\" class=\"mt-section\">\r\n<h2 class=\"editable\">Making Rational Decisions<\/h2>\r\nThe\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2320\"]rational decision-making model[\/pb_glossary]<\/a><\/span><\/strong> describes a series of steps that decision makers should consider if their goal is to maximize the quality of their outcomes. In other words, going through the formal steps of the rational decision-making model may make sense if you want to make the best choice.\r\n\r\nLet\u2019s imagine that your old, clunky car has broken down, and you have enough money saved for a substantial down payment on a new car. It will be your first significant purchase, and you want to make the right choice. Therefore, the first step has already been completed\u2014we know you want to buy a new car. Next, in step 2, you must decide which factors are essential. How many passengers do you want to accommodate? How important is fuel economy to you? Is safety a significant concern? You only have a certain amount of money saved and don\u2019t want to take on too much debt, so the price range is also essential. If you know you want to have room for at least five adults, consider a car that gets at least 20 miles per gallon, one with a strong safety rating, and spend no more than $22,000 on the purchase.\r\n\r\nAdditionally, if you like how it looks, you have identified the key decision criteria. All the potential options for purchasing your car will be evaluated against these criteria. Before we can proceed, you need to determine the importance of each factor to your decision in step 3. If each is equally important, then there is no need to weigh them against one another. However, if you know that price and mpg are key factors, you might weigh them heavily and assign medium importance to the other criteria. Step 4 requires you to generate all alternatives for your options. Then, in step 5, use this information to evaluate each alternative against the established criteria. You choose the best alternative (step 6), and then you would go out and buy your new car (step 7).\r\n\r\nOf course, the outcome of this decision will influence the next decision. That is where step 8 comes in. For example, if you purchase a car and experience problems with it, you will be less likely to consider the same make and model when repurchasing a car.\r\n<figure>\r\n\r\n[caption id=\"\" align=\"aligncenter\" width=\"483\"]<img class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19579\/631f8a657987400a0a4f4aff65c215bd.jpg?revision=1\" alt=\"1. Identify the problem. 2. Establish decision criteria. 3. Weigh decision criteria. 4. Generate alternatives. 5. Evaluate the alternatives. 6. Choose the best alternative. 7. Implement the decision. 8. Evaluate the decision. \" width=\"483\" height=\"428\" \/> Figure 6.2.3 Steps in the Rational Decision-Making Model[\/caption]\r\n\r\n<figcaption><\/figcaption><\/figure>\r\nWhile decision makers can get off track during any of these steps, research shows that searching for alternatives in the fourth step can be the most challenging and often leads to failure. One researcher found that no alternative generation occurred in 85% of the decisions he studied (Nutt, 1994). Conversely, successful managers know what they want at the outset of the decision-making process, set objectives for others to respond to, conduct an open-ended search for solutions, involve key people in the process, and avoid using their power to impose their perspective (Nutt, 1998).\r\n\r\nThe rational decision-making model offers essential lessons for decision-makers. First, when making a decision, ensure that you establish your decision criteria before searching for alternatives. This would prevent you from liking one option too much and setting your criteria accordingly. For example, let\u2019s say you started browsing cars online before you generated your decision criteria. You may come across a vehicle that reflects your sense of style and develop an emotional connection with it. Then, because of your love for the particular car, you may say to yourself that the fuel economy of the car and the innovative braking system are the most important criteria. After purchasing it, you may realize that the vehicle is too small for your friends to ride in the back seat, which was something you should have thought about. Setting criteria before you search for alternatives may prevent you from making such mistakes. Another advantage of the rational model is that it encourages decision-makers to generate all alternatives, rather than just a few. By generating many options that cover a wide range of possibilities, you are unlikely to make a more effective decision that does not require sacrificing one criterion for the sake of another.\r\n\r\nDespite all its benefits, you may have noticed that this decision-making model also involves several unrealistic assumptions. It assumes that people completely understand the decision to be made, are aware of all their available choices, have no perceptual biases, and want to make optimal decisions. Nobel Prize-winning economist Herbert Simon observed that while the rational decision-making model may aid decision-makers when working through problems, it doesn\u2019t accurately represent how decisions are frequently made within organizations. Simon argued that it didn\u2019t even come close.\r\n\r\nThink about how you make important decisions in your life. It is likely that you rarely sit down and complete all eight steps in the rational decision-making model. For example, this model suggests that we explore all possible alternatives before making a decision. Still, this process is time-consuming, and individuals are often under pressure to make decisions within a limited timeframe. Moreover, even if we had access to all the available information, it could be challenging to compare the pros and cons of each alternative and rank them according to our preferences. Anyone who has recently purchased a new laptop or cell phone can attest to the challenge of sorting through each brand and model's unique strengths and limitations to find the solution that best meets their particular needs. The availability of too much information can lead to analysis paralysis, where an excessive amount of time is spent gathering and considering information, yet no decisions are made. A senior executive at Hewlett-Packard Development Company LP admits that his company suffered from this spiral of analyzing things for too long, to the point where data gathering led to \u201cnot making decisions, instead of us making decisions\u201d (Zell, Glassman, &amp; Duron, 2007). Moreover, you may not always be interested in reaching an optimal decision. For example, if you want to purchase a house, you may be willing and able to invest a significant amount of time and energy in finding your dream house. Still, if you are only looking for an apartment to rent for the academic year, you may be willing to take the first one that meets your criteria of being clean, close to campus, and within your price range.\r\n\r\n<\/div>\r\n<div id=\"section_3\" class=\"mt-section\">\r\n<h2 class=\"editable\">Making \u201cGood Enough\u201d Decisions<\/h2>\r\nThe\u00a0<strong>[pb_glossary id=\"2338\"]bounded rationality model[\/pb_glossary] <\/strong>of decision making recognizes the limitations of our decision-making processes. According to this model, individuals knowingly limit their options to a manageable set and choose the first acceptable alternative without conducting an exhaustive search for other options. An essential part of the bounded rationality approach is the tendency to <strong>[pb_glossary id=\"2340\"]satisfy[\/pb_glossary]<\/strong> (a term Herbert Simon coined\u00a0from\u00a0<em class=\"emphasis\">satisfy<\/em>\u00a0and\u00a0<em class=\"emphasis\">suffice<\/em>), which refers to accepting the first alternative that meets your minimum criteria. For example, many college graduates do not conduct a national or international search for potential job openings. Instead, they focus their search on a limited geographic area and accept the first offer in their chosen area, even if it may not be the ideal job. Satisficing is similar to rational decision making. The main difference is that, rather than selecting the best option and maximizing the potential outcome, the decision maker saves cognitive time and effort by accepting the first alternative that meets the minimum threshold.\r\n\r\n<\/div>\r\n<div id=\"section_4\" class=\"mt-section\">\r\n<h2 class=\"editable\">Making Intuitive Decisions<\/h2>\r\nThe\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2321\"]intuitive decision-making model[\/pb_glossary]<\/a><\/span><\/strong> has emerged as an alternative to other decision-making processes. This model refers to arriving at decisions without conscious reasoning. 89% of managers surveyed admitted to using intuition to make decisions at least sometimes, and 59% said they used intuition often (Burke &amp; Miller, 1999). Managers make decisions under challenging circumstances, including time pressures, constraints, uncertainty, changing conditions, and obvious and high-stakes outcomes. Thus, it makes sense that they would not have the time to use the rational decision-making model. Yet when CEOs, financial analysts, and health care workers are asked about their critical decisions, they seldom attribute success to luck. To an outside observer, it may seem like they are making guesses about the course of action. Still, it turns out that experts systematically make decisions using a different model than was earlier suspected.\r\n\r\nResearch on life-or-death decisions by fire chiefs, pilots, and nurses finds that experts do not choose among a list of well-thought-out alternatives. They don\u2019t decide between two or three options and choose the best one. Instead, they consider only one option at a time. The intuitive decision-making model argues that in a given situation, experts making decisions scan the environment for cues to recognize patterns (Breen, 2000; Klein, 2003; Salas &amp; Klein, 2001). Once a pattern is identified, they can play out a potential course of action through to its outcome based on their prior experience. Thanks to training, experience, and knowledge, these decision makers know how well a given solution may work. If they run through the mental model and find that the solution will not work, they alter it before putting it into action. If it still is not deemed a workable solution, it is discarded as an option, and a new idea is tested until a workable solution is found. Once a viable action is identified, the decision maker puts the solution into motion. The key point is that only one choice is considered at a time. Novices cannot make effective decisions in this manner because they lack sufficient prior experience to draw upon.\r\n\r\n<\/div>\r\n<div id=\"section_5\" class=\"mt-section\">\r\n<h2 class=\"editable\">Making Creative Decisions<\/h2>\r\nIn addition to rational decision-making, bounded rationality, and intuitive decision-making models, creative decision-making is crucial for an effective decision-maker. <strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2323\"]Creativity[\/pb_glossary]<\/a><\/span><\/strong> is the generation of new, imaginative ideas. With the flattening of organizations and intense competition among companies, individuals and organizations are driven to be creative in their decisions, ranging from cost-cutting to generating new business ideas. While creativity is the first step in the innovation process, creativity and innovation differ. <strong>[pb_glossary id=\"2322\"]Innovation[\/pb_glossary]<\/strong> begins with creative ideas and involves realistic planning and follow-through. Innovations such as 3M\u2019s Clearview Window Tinting emerge from a creative decision-making process that considers what may or may not work to solve real-world problems.\r\n\r\nThe five steps to creative decision-making are similar to previous decision-making models in several key ways. All the models include problem identification, the step at which the need for problem-solving becomes apparent. It is impossible to solve a problem if you do not recognize that you have one. <strong>[pb_glossary id=\"2324\"]Immersion[\/pb_glossary]<\/strong> is when the decision maker consciously thinks about the problem and gathers information. A key to success in creative decision making is having or acquiring expertise in the studied area. Then, <strong>[pb_glossary id=\"2325\"]incubation [\/pb_glossary]<\/strong>occurs. During incubation, the individual sets the problem aside and refrains from thinking about it for a while. At this time, the brain is working on the problem unconsciously. Then comes <strong>[pb_glossary id=\"2326\"]illumination[\/pb_glossary]<\/strong>, or the insight moment when the solution to the problem becomes apparent to the person, sometimes when it is least expected. This sudden insight is the \u201ceureka\u201d moment, similar to what happened to the ancient Greek inventor Archimedes, who found a solution to the problem he was working on while taking a bath. Finally, the <strong>[pb_glossary id=\"2327\"]verification and application[\/pb_glossary]<\/strong> stage happens when the decision maker consciously verifies the feasibility of the solution and implements the decision.\r\n<figure>\r\n\r\n[caption id=\"\" align=\"aligncenter\" width=\"558\"]<img class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19581\/279d3abe0782d82925606b9a15024b96.jpg?revision=1\" alt=\"Step 1 problem recognition, Step 2 Immersion, Step 3 Incubation, Step 4 Illumination, Step 5 Verification and Application. \" width=\"558\" height=\"95\" \/> Figure 6.3.4 The Creative Decision-Making Process[\/caption]<\/figure>\r\nA NASA scientist describes his decision-making process as leading to a creative outcome: He had been trying to figure out a better way to de-ice planes to make the process faster and safer. After recognizing the problem, he immersed himself in the literature to understand all the options and worked on the issue for months, seeking a solution. It was not until he sat outside a McDonald\u2019s restaurant with his grandchildren that it dawned on him. The golden arches of the M of the McDonald\u2019s logo inspired his solution; he would design the de-icer as a series of M's. This represented the illumination stage. After he tested and verified his creative solution, he was done with that problem, except to reflect on the outcome and process.\r\n\r\n<\/div>\r\n<div id=\"section_6\" class=\"mt-section\">\r\n<h2 class=\"editable\">How Do You Know If Your Decision-Making Process Is Creative?<\/h2>\r\nResearchers focus on three factors to evaluate the level of creativity in the decision-making process.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2328\"]Fluency[\/pb_glossary] <\/a><\/span><\/strong>refers to the number of ideas a person can generate.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2329\"]Flexibility[\/pb_glossary]<\/a><\/span><\/strong> refers to how different the ideas are from one another. If you can develop several distinct solutions to a problem, your decision-making process is highly flexible. <strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2331\"]Originality[\/pb_glossary]<\/a><\/span><\/strong> refers to how unique a person\u2019s ideas are. You might say that Reed Hastings, founder and CEO of Netflix Inc., is pretty creative. His decision-making process shows at least two elements of creativity. We do not know exactly how many ideas he had throughout his career, but his ideas were quite distinct from one another. After teaching math in Africa with the Peace Corps, Hastings was accepted at Stanford, where he earned a master\u2019s degree in computer science. Soon after starting work at a software company, he invented a successful debugging tool, which led to his founding of the computer troubleshooting company Pure Software LLC in 1991. After the company's merger and subsequent sale in 1997, Hastings founded Netflix, revolutionizing the DVD rental business with online rentals delivered through the mail, accompanied by no late fees. In 2007, Hastings was elected to Microsoft\u2019s board of directors. As you can see, his ideas are high in originality and flexibility (Conlin, 2007).\r\n<figure>\r\n\r\n[caption id=\"\" align=\"aligncenter\" width=\"1024\"]<img class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19583\/38a0d281e32fa91a214c5d0d61cd8ab0.jpg?revision=1\" alt=\"Fluency, Flexibility, and Originality combine to develop creativity. \" width=\"1024\" height=\"427\" \/> Figure 6.3.5 Dimensions of Creativity[\/caption]<\/figure>\r\n<\/div>\r\n<div id=\"section_6\" class=\"mt-section\">\r\n\r\nSome experts have proposed that creativity occurs as an interaction among three factors: people\u2019s personality traits (openness to experience, risk taking), their attributes (expertise, imagination, motivation), and the situational context (encouragement from others, time pressure, physical structures) (Amabile, 1988; Amabile et al., 1996; Ford &amp; Gioia, 2000; Tierney, Farmer, &amp; Graen, 1999; Woodman, Sawyer, &amp; Griffin, 1993). For example, research shows that individuals who are open to experience, less conscientious, more self-accepting, and more impulsive tend to be more creative (Feist, 1998).\r\n<div class=\"textbox textbox--examples\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">Ideas for Enhancing Organizational Creativity<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n<ul>\r\n \t<li>Team Composition\r\n<ul>\r\n \t<li><em class=\"emphasis\">Diversify your team<\/em> to provide them with more input to build upon and more opportunities to create functional conflict, while avoiding personal strife.<\/li>\r\n \t<li><em class=\"emphasis\">Change group membership<\/em>\u00a0to stimulate new ideas and new interaction patterns.<\/li>\r\n \t<li><em class=\"emphasis\">Leaderless teams<\/em>\u00a0can allow teams freedom to create without trying to please anyone up front.<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>Team Process\r\n<ul>\r\n \t<li><em class=\"emphasis\">Engage in brainstorming<\/em> to generate ideas. Remember to set a high goal for the number of ideas the group should generate, encourage wild ideas, and take brainwriting breaks.<\/li>\r\n \t<li><em>To avoid common group process pitfalls, use the nominal group technique (see<\/em>\u00a0Tools and Techniques for Making Better Decisions\u00a0<em>below) in person or electronically<\/em>. Consider anonymous feedback as well.<\/li>\r\n \t<li><em class=\"emphasis\">Use analogies<\/em>\u00a0to envision problems and solutions.<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>Leadership\r\n<ul>\r\n \t<li><em class=\"emphasis\">Challenge teams<\/em>\u00a0so that they are engaged but not overwhelmed.<\/li>\r\n \t<li><em class=\"emphasis\">Let people decide how to achieve goals<\/em>, rather than telling them what goals to achieve.<\/li>\r\n \t<li><em class=\"emphasis\">Support and celebrate creativity<\/em>\u00a0even when it leads to a mistake. Be sure to set up processes to learn from mistakes as well.<\/li>\r\n \t<li><em class=\"emphasis\">Role model<\/em>\u00a0creative behavior.<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>Culture\r\n<ul>\r\n \t<li><em class=\"emphasis\">Institute organizational memory<\/em>\u00a0so that individuals do not spend time on routine tasks.<\/li>\r\n \t<li><em>Create a physical space that fosters\u00a0<\/em>playful and humorous creativity\u2014this is a place where ideas can flourish.<\/li>\r\n \t<li><em class=\"emphasis\">Incorporate creative behavior<\/em>\u00a0into the performance appraisal process.<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<div class=\"copyright\">\r\n\r\nSources: Adapted from ideas in Amabile, T. M. (1998). How to kill creativity.\u00a0<em class=\"emphasis\">Harvard Business Review<\/em>,\u00a0<em class=\"emphasis\">76<\/em>, 76\u201387; Gundry, L. K., Kickul, J. R., &amp; Prather, C. W. (1994). Building the creative organization.\u00a0<em class=\"emphasis\">Organizational Dynamics<\/em>,\u00a0<em class=\"emphasis\">22<\/em>, 22\u201337; Keith, N., &amp; Frese, M. (2008). Effectiveness of error management training: A meta-analysis.\u00a0<em class=\"emphasis\">Journal of Applied Psychology<\/em>,\u00a0<em class=\"emphasis\">93<\/em>, 59\u201369. Pearsall, M. J., Ellis, A. P. J., &amp; Evans, J. M. (2008). Unlocking the effects of gender faultlines on team creativity: Is activation the key?\u00a0<em class=\"emphasis\">Journal of Applied Psychology<\/em>,\u00a0<em class=\"emphasis\">93<\/em>, 225\u2013234. Thompson, L. (2003). Improving the creativity of organizational work groups.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">17<\/em>, 96\u2013109.\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\nThere are many techniques available that enhance and improve creativity. Linus Pauling, the Nobel Prize winner who popularized the idea that vitamin C could help strengthen the immune system, said, \u201cThe best way to have a good idea is to have a lot of ideas.\u201d<sup class=\"footnote\">[2]<\/sup> One popular method for generating ideas is brainstorming.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\">[pb_glossary id=\"2332\"]Brainstorming[\/pb_glossary]<\/a><\/span><\/strong> is a group process of generating ideas that follows a set of guidelines, including no criticism during the brainstorming process, the idea that no suggestion is too crazy, and building on other ideas (piggybacking). Research shows that the quantity of ideas leads to better idea quality in the end, so setting high idea quotas, in which the group must reach a set number of ideas before they are done, is recommended to avoid process loss and maximize the effectiveness of brainstorming. Another unique aspect of brainstorming is that, since the various backgrounds and approaches provide the group with more to draw upon, the more people are included in the process, the better the decision outcome tends to be. A variation of brainstorming is wildstorming, in which the group focuses on impossible ideas and then imagines what would happen to make them possible (Scott, Leritz, &amp; Mumford, 2004).\r\n\r\n<span class=\"title-prefix\">Figure 6.3.6<\/span>\r\n\r\n<\/div>\r\n<div id=\"section_6\" class=\"mt-section\">\r\n<table class=\"mt-responsive-table\">\r\n<tbody>\r\n<tr>\r\n<th>Decision-Making Model<\/th>\r\n<th>Use This Model When:<\/th>\r\n<\/tr>\r\n<tr>\r\n<td>Rational<\/td>\r\n<td>\r\n<ul>\r\n \t<li>Information on alternatives can be gathered and quantified.<\/li>\r\n \t<li>The decision is important.<\/li>\r\n \t<li>You are trying to maximize your outcome.<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Bounded Rationality<\/td>\r\n<td>\r\n<ul>\r\n \t<li>The minimum criteria are clear.<\/li>\r\n \t<li>You do not have or are unwilling to invest much time in making the decision.<\/li>\r\n \t<li>You are not trying to maximize your outcome.<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Intuitive<\/td>\r\n<td>\r\n<ul>\r\n \t<li>Goals are unclear.<\/li>\r\n \t<li>There is time pressure, and analysis paralysis would be costly.<\/li>\r\n \t<li>You have experience with the problem.<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Creative<\/td>\r\n<td>\r\n<ul>\r\n \t<li>Solutions to the problem are not clear.<\/li>\r\n \t<li>New solutions need to be generated.<\/li>\r\n \t<li>You have time to immerse yourself in the issues.<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nWhich decision-making model should I use?\r\n<div class=\"textbox textbox--exercises\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">Exercises<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n<ol>\r\n \t<li>What is the main difference between a successful and an unsuccessful decision? How much does luck versus skill have to do with it? How long does it take to know if a decision is successful?<\/li>\r\n \t<li>Research has shown that over half of the decisions made within organizations fail. Does this surprise you? Why or why not?<\/li>\r\n \t<li>Have you used the rational decision-making model to make a decision? What was the context? How well did the model work?<\/li>\r\n \t<li>Share an example of a decision in which you used satisficing. Were you happy with the outcome? Why or why not? When would you be most likely to engage in satisficing?<\/li>\r\n \t<li>Do you think intuition is respected as a decision-making style? Do you think it should be? Why or why not?<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n<div class=\"textbox textbox--examples\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">References<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n\r\nAmabile, T. M. (1988). A model of creativity and innovation in organizations. In B. M. Staw &amp; L. L. Cummings (Eds.),\u00a0<em class=\"emphasis\">Research in organizational behavior, vol. 10<\/em> (pp. 123\u2013167), Greenwich, CT: JAI Press.\r\n\r\nAmabile, T. M., Conti, R., Coon, H., Lazenby, J., &amp; Herron, M. (1996). Assessing the work environment for creativity.\u00a0<em class=\"emphasis\">Academy of Management Journal<\/em>,\u00a0<em class=\"emphasis\">39<\/em>, 1154\u20131184.\r\n\r\nBreen, B. (2000, August). What\u2019s your intuition?\u00a0<em class=\"emphasis\">Fast Company<\/em>, 290.\r\n\r\nBurke, L. A., &amp; Miller, M. K. (1999). Taking the mystery out of intuitive decision making.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">13<\/em>, 91\u201398.\r\n\r\nConlin, M. (2007, September 14). Netflix: Recruiting and retaining the best talent.\u00a0<em class=\"emphasis\">Business Week Online<\/em>. Retrieved March 1, 2008, from\u00a0<a class=\"link external\" href=\"http:\/\/www.businessweek.com\/managing\/content\/sep2007\/ca20070913_564868.htm?campaign_id=rss_null\" target=\"_blank\" rel=\"external noopener nofollow\">http:\/\/www.businessweek.com\/managing\/content\/sep2007\/ca20070913_564868.htm?campaign_id=rss_null<\/a>.\r\n\r\nFeist, G. J. (1998). A meta-analysis of personality in scientific and artistic creativity.\u00a0<em class=\"emphasis\">Personality and Social Psychology Review<\/em>,\u00a0<em class=\"emphasis\">2<\/em>, 290\u2013309.\r\n\r\nFord, C. M., &amp; Gioia, D. A. (2000). Factors influencing creativity in the domain of managerial decision making.\u00a0<em class=\"emphasis\">Journal of Management<\/em>,\u00a0<em class=\"emphasis\">26<\/em>, 705\u2013732.\r\n\r\nGarvin, D. A. (2006, January). All the wrong moves.\u00a0<em class=\"emphasis\">Harvard Business Review<\/em>,\u00a0<em class=\"emphasis\">84<\/em>, 18\u201323.\r\n\r\nIreland, R. D., &amp; Miller, C. C. (2004). Decision making and firm success.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">18<\/em>, 8\u201312.\r\n\r\nKlein, G. (2003).\u00a0<em class=\"emphasis\">Intuition at work<\/em>. New York: Doubleday.\r\n\r\nNutt, P. C. (1994). Types of organizational decision processes.\u00a0<em class=\"emphasis\">Administrative Science Quarterly<\/em>,\u00a0<em class=\"emphasis\">29<\/em>, 414\u2013550.\r\n\r\nNutt, P. C. (1998). Surprising but true: Half the decisions in organizations fail.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">13<\/em>, 75\u201390.\r\n\r\nNutt, P. C. (1999). Surprising but true: Half the decisions in organizations fail.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">13<\/em>, 75\u201390.\r\n\r\nNutt, P. C. (2002).\u00a0<em class=\"emphasis\">Why decisions fail<\/em>. San Francisco: Berrett-Koehler.\r\n\r\nSalas, E., &amp; Klein, G. (2001).\u00a0<em class=\"emphasis\">Linking expertise and naturalistic decision making<\/em>. Mahwah, NJ: Lawrence Erlbaum Associates.\r\n\r\nScott, G., Leritz, L. E., &amp; Mumford, M. D. (2004). The effectiveness of creativity training: A quantitative review.\u00a0<em class=\"emphasis\">Creativity Research Journal<\/em>,\u00a0<em class=\"emphasis\">16<\/em>, 361\u2013388.\r\n\r\nTierney, P., Farmer, S. M., &amp; Graen, G. B. (1999). An examination of leadership and employee creativity: The relevance of traits and relationships.\u00a0<em class=\"emphasis\">Personnel Psychology<\/em>,\u00a0<em class=\"emphasis\">52<\/em>, 591\u2013620.\r\n\r\nWoodman, R. W., Sawyer, J. E., &amp; Griffin, R. W. (1993). Toward a theory of organizational creativity.\u00a0<em class=\"emphasis\">Academy of Management Review<\/em>,\u00a0<em class=\"emphasis\">18<\/em>, 293\u2013321.\r\n\r\nZell, D. M., Glassman, A. M., &amp; Duron, S. A. (2007). Strategic management in turbulent times: The short and glorious history of accelerated decision making at Hewlett-Packard.\u00a0<em class=\"emphasis\">Organizational Dynamics<\/em>,\u00a0<em class=\"emphasis\">36<\/em>, 93\u2013104.\r\n\r\n<\/div>\r\n<\/div>\r\n<div class=\"textbox textbox--exercises\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">Attributions<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n\r\n<a class=\"internal mt-self-link\" href=\"https:\/\/biz.libretexts.org\/Bookshelves\/Management\/Organizational_Behavior\/11%3A_Making_Decisions\/11.2%3A_Understanding_Decision_Making\" target=\"_blank\" rel=\"internal noopener\">11.2: Understanding Decision Making<\/a>\u00a0is shared under a\u00a0<a href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/3.0\" target=\"_blank\" rel=\"nofollow noopener\">CC BY-NC-SA 3.0<\/a>\u00a0license and was authored, remixed, and\/or curated by\u00a0<a href=\"https:\/\/biz.libretexts.org\/Bookshelves\/Management\/Organizational_Behavior\/11%3A_Making_Decisions\/11.2%3A_Understanding_Decision_Making\" target=\"_blank\" rel=\"nofollow noopener\">Anonymous<\/a>.\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>","rendered":"<div class=\"textbox textbox--learning-objectives\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">Learning Objectives<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<p>By the end of this section, you should be able to:<\/p>\n<ul>\n<li>Define decision-making.<\/li>\n<li>Understand different types of decisions.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p><strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2311\">Decision-making<\/a><\/strong> refers to choosing alternative courses of action, which may also include inaction. At the same time, it can be argued that management involves decision-making; half of the decisions managers make within organizations ultimately fail (Ireland &amp; Miller, 2004; Nutt, 2002, 1999). Therefore, increasing one&#8217;s effectiveness in decision-making is crucial to maximizing overall work performance.<\/p>\n<p>This chapter will help you understand how to make decisions, both alone and in a group, while avoiding common pitfalls. Individuals throughout organizations use the information they gather to make a wide range of decisions. These decisions can have a profound impact on the lives of others and significantly alter the course of an organization. For example, the decisions made by executives and consulting firms at Enron ultimately resulted in a $60 billion loss for investors, thousands of employees losing their jobs, and the loss of all employee retirement funds. However, Sherron Watkins, a former Enron employee and now-famous whistleblower, uncovered the accounting problems and tried to enact change. Similarly, the decision by firms to trade in mortgage-backed securities is hurting the entire U.S. economy. All parties involved in such outcomes made a decision, and everyone is now living with the consequences of those decisions.<\/p>\n<div id=\"section_1\" class=\"mt-section\">\n<h2 class=\"editable\">Types of Decisions<\/h2>\n<div class=\"epigraph block\">\n<p>Most discussions of decision making assume that only senior executives make decisions or that only senior executives\u2019 decisions matter. This is a dangerous mistake.<\/p>\n<p class=\"indent attribution\">Peter Drucker<\/p>\n<\/div>\n<p>Despite the far-reaching decisions in the previous example, not all have significant consequences or require much thought. For instance, before you come to class, you make habitual and straightforward decisions such as what to wear, what to eat, and which route to take to and from home and school. You probably do not spend much time on these mundane decisions. These straightforward decisions are termed <strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2313\">programmed decisions<\/a><\/a><\/span><\/strong>, which occur frequently enough that we develop an automated response to them. The computerized response we use to make these decisions is called the <strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2314\">decision rule<\/a><\/a><\/span><\/strong>. For example, many restaurants routinely face customer complaints as part of their business. Because complaints are a recurring problem, responding to them may become a programmed decision. The restaurant might enact a policy stating that every time they receive a valid customer complaint, they should receive a free dessert, representing a decision rule.<\/p>\n<figure>\n<figure style=\"width: 300px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19577\/3a52480920291de027f1daf98c65a928.jpg?revision=1\" alt=\"Image of McDonalds which uses standardized recipes for consistency around the globe.\" width=\"300\" height=\"225\" \/><figcaption class=\"wp-caption-text\">Figure 6.2.1 To ensure consistency around the globe, such as at this St. Petersburg, Russia, location, McDonald\u2019s Corporation trains all restaurant managers at Hamburger University. There, they take the equivalent of two years of college courses and learn how to make decisions on the job. The curriculum is taught in 28 languages. Wikimedia Commons\u2014public domain.<\/figcaption><\/figure><figcaption><\/figcaption><\/figure>\n<p>On the other hand, unique and essential decisions require conscious thinking, information gathering, and careful consideration of alternatives. These are called <strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2316\">nonprogrammed decisions<\/a><\/a><\/span><\/strong>. For example, in 2005, McDonald\u2019s Corporation became aware of the need to respond to growing customer concerns regarding the unhealthy aspects (high in fat and calories) of the food they sell. This is a non-programmed decision because, for several decades, customers of fast-food restaurants have been more concerned with the taste and price of the food than its health implications. In response to this problem, McDonald\u2019s decided to offer healthier alternatives, such as substituting French fries in Happy Meals with apple slices. In 2007, they also banned the use of trans fat at their restaurants.<\/p>\n<p>A crisis also constitutes a nonprogrammed decision for companies. For example, the leadership of Nutrorim was facing a tough decision. They had recently introduced a new product, ChargeUp with Lipitrene, an improved version of their popular sports drink powder, ChargeUp. At some point, a phone call came from a state health department to inform them of 11 cases of gastrointestinal distress that might be related to their product, which led to a decision to recall ChargeUp. The decision was made without an investigation of the information. While this decision was conservative, it was made without a process that weighed the information. Two weeks later, it became clear that the reported health problems were unrelated to Nutrorim\u2019s product. All the cases were traced back to a contaminated juice bar at a health club. However, damage to the brand and the balance sheets had already been done. This unfortunate decision prompted Nutrorim to reassess its approach to decision-making under pressure. The company now gathers information to make informed choices even when time is of the essence (Garvin, 2006).<\/p>\n<p>Decisions can be classified into three categories based on the level at which they occur.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2317\">Strategic decisions<\/a><\/a><\/span><\/strong>\u00a0set the course of an organization.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2318\">Tactical decisions<\/a><\/a><\/span><\/strong>\u00a0are decisions about how things will get done. Finally,\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2319\">operational decisions<\/a><\/a><\/span><\/strong> refer to employees&#8217; daily decisions to make the organization run. For example, consider the restaurant offering a free dessert when a customer complaint is received. The restaurant owner made a strategic decision to have excellent customer service. The restaurant manager implemented a free dessert policy as a way to address customer complaints, a tactical decision. Finally, the restaurant servers make individual decisions each day by evaluating whether each customer complaint received is legitimate and warrants a free dessert.<\/p>\n<p><em><span class=\"title-prefix\">Figure 6.2.2<\/span>\u00a0Examples of Decisions Commonly Made Within Organizations<\/em><\/p>\n<table class=\"mt-responsive-table\">\n<tbody>\n<tr>\n<th>Level of Decision<\/th>\n<th>Examples of Decision<\/th>\n<th>Who Typically Makes Decisions<\/th>\n<\/tr>\n<tr>\n<td>Strategic Decisions<\/td>\n<td>Should we merge with another company?<br \/>\nShould we pursue a new product line?<br \/>\nShould we downsize our organization?<\/td>\n<td>Top Management Teams, CEOs, and Boards of Directors<\/td>\n<\/tr>\n<tr>\n<td>Tactical Decisions<\/td>\n<td>What can we do to help facilitate collaboration between employees from the two companies?<br \/>\nHow should we market the new product line?<br \/>\nWho should be let go when we downsize?<\/td>\n<td>Managers<\/td>\n<\/tr>\n<tr>\n<td>Operational Decisions<\/td>\n<td>How often should I communicate with my new coworkers?<br \/>\nWhat should I say to customers about our new product?<br \/>\nHow will I balance my new work demands?<\/td>\n<td>Employees throughout the organization<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>In this section, we will discuss different decision-making models designed to understand and evaluate the effectiveness of nonprogrammed decisions. We will cover four approaches: the rational decision-making model, the bounded rationality decision-making model, the intuitive decision-making model, and the creative decision-making model.<\/p>\n<\/div>\n<div id=\"section_2\" class=\"mt-section\">\n<h2 class=\"editable\">Making Rational Decisions<\/h2>\n<p>The\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2320\">rational decision-making model<\/a><\/a><\/span><\/strong> describes a series of steps that decision makers should consider if their goal is to maximize the quality of their outcomes. In other words, going through the formal steps of the rational decision-making model may make sense if you want to make the best choice.<\/p>\n<p>Let\u2019s imagine that your old, clunky car has broken down, and you have enough money saved for a substantial down payment on a new car. It will be your first significant purchase, and you want to make the right choice. Therefore, the first step has already been completed\u2014we know you want to buy a new car. Next, in step 2, you must decide which factors are essential. How many passengers do you want to accommodate? How important is fuel economy to you? Is safety a significant concern? You only have a certain amount of money saved and don\u2019t want to take on too much debt, so the price range is also essential. If you know you want to have room for at least five adults, consider a car that gets at least 20 miles per gallon, one with a strong safety rating, and spend no more than $22,000 on the purchase.<\/p>\n<p>Additionally, if you like how it looks, you have identified the key decision criteria. All the potential options for purchasing your car will be evaluated against these criteria. Before we can proceed, you need to determine the importance of each factor to your decision in step 3. If each is equally important, then there is no need to weigh them against one another. However, if you know that price and mpg are key factors, you might weigh them heavily and assign medium importance to the other criteria. Step 4 requires you to generate all alternatives for your options. Then, in step 5, use this information to evaluate each alternative against the established criteria. You choose the best alternative (step 6), and then you would go out and buy your new car (step 7).<\/p>\n<p>Of course, the outcome of this decision will influence the next decision. That is where step 8 comes in. For example, if you purchase a car and experience problems with it, you will be less likely to consider the same make and model when repurchasing a car.<\/p>\n<figure>\n<figure style=\"width: 483px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19579\/631f8a657987400a0a4f4aff65c215bd.jpg?revision=1\" alt=\"1. Identify the problem. 2. Establish decision criteria. 3. Weigh decision criteria. 4. Generate alternatives. 5. Evaluate the alternatives. 6. Choose the best alternative. 7. Implement the decision. 8. Evaluate the decision.\" width=\"483\" height=\"428\" \/><figcaption class=\"wp-caption-text\">Figure 6.2.3 Steps in the Rational Decision-Making Model<\/figcaption><\/figure><figcaption><\/figcaption><\/figure>\n<p>While decision makers can get off track during any of these steps, research shows that searching for alternatives in the fourth step can be the most challenging and often leads to failure. One researcher found that no alternative generation occurred in 85% of the decisions he studied (Nutt, 1994). Conversely, successful managers know what they want at the outset of the decision-making process, set objectives for others to respond to, conduct an open-ended search for solutions, involve key people in the process, and avoid using their power to impose their perspective (Nutt, 1998).<\/p>\n<p>The rational decision-making model offers essential lessons for decision-makers. First, when making a decision, ensure that you establish your decision criteria before searching for alternatives. This would prevent you from liking one option too much and setting your criteria accordingly. For example, let\u2019s say you started browsing cars online before you generated your decision criteria. You may come across a vehicle that reflects your sense of style and develop an emotional connection with it. Then, because of your love for the particular car, you may say to yourself that the fuel economy of the car and the innovative braking system are the most important criteria. After purchasing it, you may realize that the vehicle is too small for your friends to ride in the back seat, which was something you should have thought about. Setting criteria before you search for alternatives may prevent you from making such mistakes. Another advantage of the rational model is that it encourages decision-makers to generate all alternatives, rather than just a few. By generating many options that cover a wide range of possibilities, you are unlikely to make a more effective decision that does not require sacrificing one criterion for the sake of another.<\/p>\n<p>Despite all its benefits, you may have noticed that this decision-making model also involves several unrealistic assumptions. It assumes that people completely understand the decision to be made, are aware of all their available choices, have no perceptual biases, and want to make optimal decisions. Nobel Prize-winning economist Herbert Simon observed that while the rational decision-making model may aid decision-makers when working through problems, it doesn\u2019t accurately represent how decisions are frequently made within organizations. Simon argued that it didn\u2019t even come close.<\/p>\n<p>Think about how you make important decisions in your life. It is likely that you rarely sit down and complete all eight steps in the rational decision-making model. For example, this model suggests that we explore all possible alternatives before making a decision. Still, this process is time-consuming, and individuals are often under pressure to make decisions within a limited timeframe. Moreover, even if we had access to all the available information, it could be challenging to compare the pros and cons of each alternative and rank them according to our preferences. Anyone who has recently purchased a new laptop or cell phone can attest to the challenge of sorting through each brand and model&#8217;s unique strengths and limitations to find the solution that best meets their particular needs. The availability of too much information can lead to analysis paralysis, where an excessive amount of time is spent gathering and considering information, yet no decisions are made. A senior executive at Hewlett-Packard Development Company LP admits that his company suffered from this spiral of analyzing things for too long, to the point where data gathering led to \u201cnot making decisions, instead of us making decisions\u201d (Zell, Glassman, &amp; Duron, 2007). Moreover, you may not always be interested in reaching an optimal decision. For example, if you want to purchase a house, you may be willing and able to invest a significant amount of time and energy in finding your dream house. Still, if you are only looking for an apartment to rent for the academic year, you may be willing to take the first one that meets your criteria of being clean, close to campus, and within your price range.<\/p>\n<\/div>\n<div id=\"section_3\" class=\"mt-section\">\n<h2 class=\"editable\">Making \u201cGood Enough\u201d Decisions<\/h2>\n<p>The\u00a0<strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2338\">bounded rationality model<\/a> <\/strong>of decision making recognizes the limitations of our decision-making processes. According to this model, individuals knowingly limit their options to a manageable set and choose the first acceptable alternative without conducting an exhaustive search for other options. An essential part of the bounded rationality approach is the tendency to <strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2340\">satisfy<\/a><\/strong> (a term Herbert Simon coined\u00a0from\u00a0<em class=\"emphasis\">satisfy<\/em>\u00a0and\u00a0<em class=\"emphasis\">suffice<\/em>), which refers to accepting the first alternative that meets your minimum criteria. For example, many college graduates do not conduct a national or international search for potential job openings. Instead, they focus their search on a limited geographic area and accept the first offer in their chosen area, even if it may not be the ideal job. Satisficing is similar to rational decision making. The main difference is that, rather than selecting the best option and maximizing the potential outcome, the decision maker saves cognitive time and effort by accepting the first alternative that meets the minimum threshold.<\/p>\n<\/div>\n<div id=\"section_4\" class=\"mt-section\">\n<h2 class=\"editable\">Making Intuitive Decisions<\/h2>\n<p>The\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2321\">intuitive decision-making model<\/a><\/a><\/span><\/strong> has emerged as an alternative to other decision-making processes. This model refers to arriving at decisions without conscious reasoning. 89% of managers surveyed admitted to using intuition to make decisions at least sometimes, and 59% said they used intuition often (Burke &amp; Miller, 1999). Managers make decisions under challenging circumstances, including time pressures, constraints, uncertainty, changing conditions, and obvious and high-stakes outcomes. Thus, it makes sense that they would not have the time to use the rational decision-making model. Yet when CEOs, financial analysts, and health care workers are asked about their critical decisions, they seldom attribute success to luck. To an outside observer, it may seem like they are making guesses about the course of action. Still, it turns out that experts systematically make decisions using a different model than was earlier suspected.<\/p>\n<p>Research on life-or-death decisions by fire chiefs, pilots, and nurses finds that experts do not choose among a list of well-thought-out alternatives. They don\u2019t decide between two or three options and choose the best one. Instead, they consider only one option at a time. The intuitive decision-making model argues that in a given situation, experts making decisions scan the environment for cues to recognize patterns (Breen, 2000; Klein, 2003; Salas &amp; Klein, 2001). Once a pattern is identified, they can play out a potential course of action through to its outcome based on their prior experience. Thanks to training, experience, and knowledge, these decision makers know how well a given solution may work. If they run through the mental model and find that the solution will not work, they alter it before putting it into action. If it still is not deemed a workable solution, it is discarded as an option, and a new idea is tested until a workable solution is found. Once a viable action is identified, the decision maker puts the solution into motion. The key point is that only one choice is considered at a time. Novices cannot make effective decisions in this manner because they lack sufficient prior experience to draw upon.<\/p>\n<\/div>\n<div id=\"section_5\" class=\"mt-section\">\n<h2 class=\"editable\">Making Creative Decisions<\/h2>\n<p>In addition to rational decision-making, bounded rationality, and intuitive decision-making models, creative decision-making is crucial for an effective decision-maker. <strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2323\">Creativity<\/a><\/a><\/span><\/strong> is the generation of new, imaginative ideas. With the flattening of organizations and intense competition among companies, individuals and organizations are driven to be creative in their decisions, ranging from cost-cutting to generating new business ideas. While creativity is the first step in the innovation process, creativity and innovation differ. <strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2322\">Innovation<\/a><\/strong> begins with creative ideas and involves realistic planning and follow-through. Innovations such as 3M\u2019s Clearview Window Tinting emerge from a creative decision-making process that considers what may or may not work to solve real-world problems.<\/p>\n<p>The five steps to creative decision-making are similar to previous decision-making models in several key ways. All the models include problem identification, the step at which the need for problem-solving becomes apparent. It is impossible to solve a problem if you do not recognize that you have one. <strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2324\">Immersion<\/a><\/strong> is when the decision maker consciously thinks about the problem and gathers information. A key to success in creative decision making is having or acquiring expertise in the studied area. Then, <strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2325\">incubation <\/a><\/strong>occurs. During incubation, the individual sets the problem aside and refrains from thinking about it for a while. At this time, the brain is working on the problem unconsciously. Then comes <strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2326\">illumination<\/a><\/strong>, or the insight moment when the solution to the problem becomes apparent to the person, sometimes when it is least expected. This sudden insight is the \u201ceureka\u201d moment, similar to what happened to the ancient Greek inventor Archimedes, who found a solution to the problem he was working on while taking a bath. Finally, the <strong><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2327\">verification and application<\/a><\/strong> stage happens when the decision maker consciously verifies the feasibility of the solution and implements the decision.<\/p>\n<figure>\n<figure style=\"width: 558px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19581\/279d3abe0782d82925606b9a15024b96.jpg?revision=1\" alt=\"Step 1 problem recognition, Step 2 Immersion, Step 3 Incubation, Step 4 Illumination, Step 5 Verification and Application.\" width=\"558\" height=\"95\" \/><figcaption class=\"wp-caption-text\">Figure 6.3.4 The Creative Decision-Making Process<\/figcaption><\/figure>\n<\/figure>\n<p>A NASA scientist describes his decision-making process as leading to a creative outcome: He had been trying to figure out a better way to de-ice planes to make the process faster and safer. After recognizing the problem, he immersed himself in the literature to understand all the options and worked on the issue for months, seeking a solution. It was not until he sat outside a McDonald\u2019s restaurant with his grandchildren that it dawned on him. The golden arches of the M of the McDonald\u2019s logo inspired his solution; he would design the de-icer as a series of M&#8217;s. This represented the illumination stage. After he tested and verified his creative solution, he was done with that problem, except to reflect on the outcome and process.<\/p>\n<\/div>\n<div id=\"section_6\" class=\"mt-section\">\n<h2 class=\"editable\">How Do You Know If Your Decision-Making Process Is Creative?<\/h2>\n<p>Researchers focus on three factors to evaluate the level of creativity in the decision-making process.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2328\">Fluency<\/a> <\/a><\/span><\/strong>refers to the number of ideas a person can generate.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2329\">Flexibility<\/a><\/a><\/span><\/strong> refers to how different the ideas are from one another. If you can develop several distinct solutions to a problem, your decision-making process is highly flexible. <strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2331\">Originality<\/a><\/a><\/span><\/strong> refers to how unique a person\u2019s ideas are. You might say that Reed Hastings, founder and CEO of Netflix Inc., is pretty creative. His decision-making process shows at least two elements of creativity. We do not know exactly how many ideas he had throughout his career, but his ideas were quite distinct from one another. After teaching math in Africa with the Peace Corps, Hastings was accepted at Stanford, where he earned a master\u2019s degree in computer science. Soon after starting work at a software company, he invented a successful debugging tool, which led to his founding of the computer troubleshooting company Pure Software LLC in 1991. After the company&#8217;s merger and subsequent sale in 1997, Hastings founded Netflix, revolutionizing the DVD rental business with online rentals delivered through the mail, accompanied by no late fees. In 2007, Hastings was elected to Microsoft\u2019s board of directors. As you can see, his ideas are high in originality and flexibility (Conlin, 2007).<\/p>\n<figure>\n<figure style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"internal\" src=\"https:\/\/biz.libretexts.org\/@api\/deki\/files\/19583\/38a0d281e32fa91a214c5d0d61cd8ab0.jpg?revision=1\" alt=\"Fluency, Flexibility, and Originality combine to develop creativity.\" width=\"1024\" height=\"427\" \/><figcaption class=\"wp-caption-text\">Figure 6.3.5 Dimensions of Creativity<\/figcaption><\/figure>\n<\/figure>\n<\/div>\n<div class=\"mt-section\">\n<p>Some experts have proposed that creativity occurs as an interaction among three factors: people\u2019s personality traits (openness to experience, risk taking), their attributes (expertise, imagination, motivation), and the situational context (encouragement from others, time pressure, physical structures) (Amabile, 1988; Amabile et al., 1996; Ford &amp; Gioia, 2000; Tierney, Farmer, &amp; Graen, 1999; Woodman, Sawyer, &amp; Griffin, 1993). For example, research shows that individuals who are open to experience, less conscientious, more self-accepting, and more impulsive tend to be more creative (Feist, 1998).<\/p>\n<div class=\"textbox textbox--examples\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">Ideas for Enhancing Organizational Creativity<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<ul>\n<li>Team Composition\n<ul>\n<li><em class=\"emphasis\">Diversify your team<\/em> to provide them with more input to build upon and more opportunities to create functional conflict, while avoiding personal strife.<\/li>\n<li><em class=\"emphasis\">Change group membership<\/em>\u00a0to stimulate new ideas and new interaction patterns.<\/li>\n<li><em class=\"emphasis\">Leaderless teams<\/em>\u00a0can allow teams freedom to create without trying to please anyone up front.<\/li>\n<\/ul>\n<\/li>\n<li>Team Process\n<ul>\n<li><em class=\"emphasis\">Engage in brainstorming<\/em> to generate ideas. Remember to set a high goal for the number of ideas the group should generate, encourage wild ideas, and take brainwriting breaks.<\/li>\n<li><em>To avoid common group process pitfalls, use the nominal group technique (see<\/em>\u00a0Tools and Techniques for Making Better Decisions\u00a0<em>below) in person or electronically<\/em>. Consider anonymous feedback as well.<\/li>\n<li><em class=\"emphasis\">Use analogies<\/em>\u00a0to envision problems and solutions.<\/li>\n<\/ul>\n<\/li>\n<li>Leadership\n<ul>\n<li><em class=\"emphasis\">Challenge teams<\/em>\u00a0so that they are engaged but not overwhelmed.<\/li>\n<li><em class=\"emphasis\">Let people decide how to achieve goals<\/em>, rather than telling them what goals to achieve.<\/li>\n<li><em class=\"emphasis\">Support and celebrate creativity<\/em>\u00a0even when it leads to a mistake. Be sure to set up processes to learn from mistakes as well.<\/li>\n<li><em class=\"emphasis\">Role model<\/em>\u00a0creative behavior.<\/li>\n<\/ul>\n<\/li>\n<li>Culture\n<ul>\n<li><em class=\"emphasis\">Institute organizational memory<\/em>\u00a0so that individuals do not spend time on routine tasks.<\/li>\n<li><em>Create a physical space that fosters\u00a0<\/em>playful and humorous creativity\u2014this is a place where ideas can flourish.<\/li>\n<li><em class=\"emphasis\">Incorporate creative behavior<\/em>\u00a0into the performance appraisal process.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<div class=\"copyright\">\n<p>Sources: Adapted from ideas in Amabile, T. M. (1998). How to kill creativity.\u00a0<em class=\"emphasis\">Harvard Business Review<\/em>,\u00a0<em class=\"emphasis\">76<\/em>, 76\u201387; Gundry, L. K., Kickul, J. R., &amp; Prather, C. W. (1994). Building the creative organization.\u00a0<em class=\"emphasis\">Organizational Dynamics<\/em>,\u00a0<em class=\"emphasis\">22<\/em>, 22\u201337; Keith, N., &amp; Frese, M. (2008). Effectiveness of error management training: A meta-analysis.\u00a0<em class=\"emphasis\">Journal of Applied Psychology<\/em>,\u00a0<em class=\"emphasis\">93<\/em>, 59\u201369. Pearsall, M. J., Ellis, A. P. J., &amp; Evans, J. M. (2008). Unlocking the effects of gender faultlines on team creativity: Is activation the key?\u00a0<em class=\"emphasis\">Journal of Applied Psychology<\/em>,\u00a0<em class=\"emphasis\">93<\/em>, 225\u2013234. Thompson, L. (2003). Improving the creativity of organizational work groups.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">17<\/em>, 96\u2013109.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p>There are many techniques available that enhance and improve creativity. Linus Pauling, the Nobel Prize winner who popularized the idea that vitamin C could help strengthen the immune system, said, \u201cThe best way to have a good idea is to have a lot of ideas.\u201d<sup class=\"footnote\">[2]<\/sup> One popular method for generating ideas is brainstorming.\u00a0<strong><span class=\"margin_term\"><a class=\"glossterm\"><a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1545_2332\">Brainstorming<\/a><\/a><\/span><\/strong> is a group process of generating ideas that follows a set of guidelines, including no criticism during the brainstorming process, the idea that no suggestion is too crazy, and building on other ideas (piggybacking). Research shows that the quantity of ideas leads to better idea quality in the end, so setting high idea quotas, in which the group must reach a set number of ideas before they are done, is recommended to avoid process loss and maximize the effectiveness of brainstorming. Another unique aspect of brainstorming is that, since the various backgrounds and approaches provide the group with more to draw upon, the more people are included in the process, the better the decision outcome tends to be. A variation of brainstorming is wildstorming, in which the group focuses on impossible ideas and then imagines what would happen to make them possible (Scott, Leritz, &amp; Mumford, 2004).<\/p>\n<p><span class=\"title-prefix\">Figure 6.3.6<\/span><\/p>\n<\/div>\n<div class=\"mt-section\">\n<table class=\"mt-responsive-table\">\n<tbody>\n<tr>\n<th>Decision-Making Model<\/th>\n<th>Use This Model When:<\/th>\n<\/tr>\n<tr>\n<td>Rational<\/td>\n<td>\n<ul>\n<li>Information on alternatives can be gathered and quantified.<\/li>\n<li>The decision is important.<\/li>\n<li>You are trying to maximize your outcome.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>Bounded Rationality<\/td>\n<td>\n<ul>\n<li>The minimum criteria are clear.<\/li>\n<li>You do not have or are unwilling to invest much time in making the decision.<\/li>\n<li>You are not trying to maximize your outcome.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>Intuitive<\/td>\n<td>\n<ul>\n<li>Goals are unclear.<\/li>\n<li>There is time pressure, and analysis paralysis would be costly.<\/li>\n<li>You have experience with the problem.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>Creative<\/td>\n<td>\n<ul>\n<li>Solutions to the problem are not clear.<\/li>\n<li>New solutions need to be generated.<\/li>\n<li>You have time to immerse yourself in the issues.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Which decision-making model should I use?<\/p>\n<div class=\"textbox textbox--exercises\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">Exercises<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<ol>\n<li>What is the main difference between a successful and an unsuccessful decision? How much does luck versus skill have to do with it? How long does it take to know if a decision is successful?<\/li>\n<li>Research has shown that over half of the decisions made within organizations fail. Does this surprise you? Why or why not?<\/li>\n<li>Have you used the rational decision-making model to make a decision? What was the context? How well did the model work?<\/li>\n<li>Share an example of a decision in which you used satisficing. Were you happy with the outcome? Why or why not? When would you be most likely to engage in satisficing?<\/li>\n<li>Do you think intuition is respected as a decision-making style? Do you think it should be? Why or why not?<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<div class=\"textbox textbox--examples\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">References<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<p>Amabile, T. M. (1988). A model of creativity and innovation in organizations. In B. M. Staw &amp; L. L. Cummings (Eds.),\u00a0<em class=\"emphasis\">Research in organizational behavior, vol. 10<\/em> (pp. 123\u2013167), Greenwich, CT: JAI Press.<\/p>\n<p>Amabile, T. M., Conti, R., Coon, H., Lazenby, J., &amp; Herron, M. (1996). Assessing the work environment for creativity.\u00a0<em class=\"emphasis\">Academy of Management Journal<\/em>,\u00a0<em class=\"emphasis\">39<\/em>, 1154\u20131184.<\/p>\n<p>Breen, B. (2000, August). What\u2019s your intuition?\u00a0<em class=\"emphasis\">Fast Company<\/em>, 290.<\/p>\n<p>Burke, L. A., &amp; Miller, M. K. (1999). Taking the mystery out of intuitive decision making.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">13<\/em>, 91\u201398.<\/p>\n<p>Conlin, M. (2007, September 14). Netflix: Recruiting and retaining the best talent.\u00a0<em class=\"emphasis\">Business Week Online<\/em>. Retrieved March 1, 2008, from\u00a0<a class=\"link external\" href=\"http:\/\/www.businessweek.com\/managing\/content\/sep2007\/ca20070913_564868.htm?campaign_id=rss_null\" target=\"_blank\" rel=\"external noopener nofollow\">http:\/\/www.businessweek.com\/managing\/content\/sep2007\/ca20070913_564868.htm?campaign_id=rss_null<\/a>.<\/p>\n<p>Feist, G. J. (1998). A meta-analysis of personality in scientific and artistic creativity.\u00a0<em class=\"emphasis\">Personality and Social Psychology Review<\/em>,\u00a0<em class=\"emphasis\">2<\/em>, 290\u2013309.<\/p>\n<p>Ford, C. M., &amp; Gioia, D. A. (2000). Factors influencing creativity in the domain of managerial decision making.\u00a0<em class=\"emphasis\">Journal of Management<\/em>,\u00a0<em class=\"emphasis\">26<\/em>, 705\u2013732.<\/p>\n<p>Garvin, D. A. (2006, January). All the wrong moves.\u00a0<em class=\"emphasis\">Harvard Business Review<\/em>,\u00a0<em class=\"emphasis\">84<\/em>, 18\u201323.<\/p>\n<p>Ireland, R. D., &amp; Miller, C. C. (2004). Decision making and firm success.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">18<\/em>, 8\u201312.<\/p>\n<p>Klein, G. (2003).\u00a0<em class=\"emphasis\">Intuition at work<\/em>. New York: Doubleday.<\/p>\n<p>Nutt, P. C. (1994). Types of organizational decision processes.\u00a0<em class=\"emphasis\">Administrative Science Quarterly<\/em>,\u00a0<em class=\"emphasis\">29<\/em>, 414\u2013550.<\/p>\n<p>Nutt, P. C. (1998). Surprising but true: Half the decisions in organizations fail.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">13<\/em>, 75\u201390.<\/p>\n<p>Nutt, P. C. (1999). Surprising but true: Half the decisions in organizations fail.\u00a0<em class=\"emphasis\">Academy of Management Executive<\/em>,\u00a0<em class=\"emphasis\">13<\/em>, 75\u201390.<\/p>\n<p>Nutt, P. C. (2002).\u00a0<em class=\"emphasis\">Why decisions fail<\/em>. San Francisco: Berrett-Koehler.<\/p>\n<p>Salas, E., &amp; Klein, G. (2001).\u00a0<em class=\"emphasis\">Linking expertise and naturalistic decision making<\/em>. Mahwah, NJ: Lawrence Erlbaum Associates.<\/p>\n<p>Scott, G., Leritz, L. E., &amp; Mumford, M. D. (2004). The effectiveness of creativity training: A quantitative review.\u00a0<em class=\"emphasis\">Creativity Research Journal<\/em>,\u00a0<em class=\"emphasis\">16<\/em>, 361\u2013388.<\/p>\n<p>Tierney, P., Farmer, S. M., &amp; Graen, G. B. (1999). An examination of leadership and employee creativity: The relevance of traits and relationships.\u00a0<em class=\"emphasis\">Personnel Psychology<\/em>,\u00a0<em class=\"emphasis\">52<\/em>, 591\u2013620.<\/p>\n<p>Woodman, R. W., Sawyer, J. E., &amp; Griffin, R. W. (1993). Toward a theory of organizational creativity.\u00a0<em class=\"emphasis\">Academy of Management Review<\/em>,\u00a0<em class=\"emphasis\">18<\/em>, 293\u2013321.<\/p>\n<p>Zell, D. M., Glassman, A. M., &amp; Duron, S. A. (2007). Strategic management in turbulent times: The short and glorious history of accelerated decision making at Hewlett-Packard.\u00a0<em class=\"emphasis\">Organizational Dynamics<\/em>,\u00a0<em class=\"emphasis\">36<\/em>, 93\u2013104.<\/p>\n<\/div>\n<\/div>\n<div class=\"textbox textbox--exercises\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">Attributions<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<p><a class=\"internal mt-self-link\" href=\"https:\/\/biz.libretexts.org\/Bookshelves\/Management\/Organizational_Behavior\/11%3A_Making_Decisions\/11.2%3A_Understanding_Decision_Making\" target=\"_blank\" rel=\"internal noopener\">11.2: Understanding Decision Making<\/a>\u00a0is shared under a\u00a0<a href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/3.0\" target=\"_blank\" rel=\"nofollow noopener\">CC BY-NC-SA 3.0<\/a>\u00a0license and was authored, remixed, and\/or curated by\u00a0<a href=\"https:\/\/biz.libretexts.org\/Bookshelves\/Management\/Organizational_Behavior\/11%3A_Making_Decisions\/11.2%3A_Understanding_Decision_Making\" target=\"_blank\" rel=\"nofollow noopener\">Anonymous<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"glossary\"><span class=\"screen-reader-text\" id=\"definition\">definition<\/span><template id=\"term_1545_2311\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2311\"><div tabindex=\"-1\"><p>choosing alternative courses of action, which may also include inaction.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2313\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2313\"><div tabindex=\"-1\"><p>occur frequently enough that we develop an automated response to them.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2314\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2314\"><div tabindex=\"-1\"><p>computerized response we use to make these decisions.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2316\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2316\"><div tabindex=\"-1\"><p>unique and essential decisions require conscious thinking, information gathering, and careful consideration of alternatives.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2317\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2317\"><div tabindex=\"-1\"><p>set the course of an organization.\u00a0<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2318\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2318\"><div tabindex=\"-1\"><p>decisions about how things will get done.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2319\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2319\"><div tabindex=\"-1\"><p>refer to employees' daily decisions to make the organization run.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2320\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2320\"><div tabindex=\"-1\"><p>describes a series of steps that decision makers should consider if their goal is to maximize the quality of their outcomes.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2338\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2338\"><div tabindex=\"-1\"><p>recognizes the limitations of our decision-making processes.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2340\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2340\"><div tabindex=\"-1\"><p>refers to accepting the first alternative that meets your minimum criteria.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2321\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2321\"><div tabindex=\"-1\"><p>arriving at decisions without conscious reasoning.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2323\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2323\"><div tabindex=\"-1\"><p>is the generation of new, imaginative ideas.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2322\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2322\"><div tabindex=\"-1\"><p>begins with creative ideas and involves realistic planning and follow-through.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2324\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2324\"><div tabindex=\"-1\"><p>is when the decision maker consciously thinks about the problem and gathers information.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2325\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2325\"><div tabindex=\"-1\"><p>At this time, the brain is working on the problem unconsciously.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2326\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2326\"><div tabindex=\"-1\"><p>the insight moment when the solution to the problem becomes apparent to the person, sometimes when it is least expected.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2327\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2327\"><div tabindex=\"-1\"><p>when the decision maker consciously verifies the feasibility of the solution and implements the decision.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2328\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2328\"><div tabindex=\"-1\"><p>refers to the number of ideas a person can generate.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2329\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2329\"><div tabindex=\"-1\"><p>refers to how different the ideas are from one another.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2331\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2331\"><div tabindex=\"-1\"><p>refers to how unique a person\u2019s ideas are.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1545_2332\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1545_2332\"><div tabindex=\"-1\"><p>is a group process of generating ideas that follows a set of guidelines, including no criticism during the brainstorming process, the idea that no suggestion is too crazy, and building on other ideas.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><\/div>","protected":false},"author":169,"menu_order":2,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-1545","chapter","type-chapter","status-publish","hentry"],"part":1534,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/pressbooks\/v2\/chapters\/1545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/wp\/v2\/users\/169"}],"version-history":[{"count":31,"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/pressbooks\/v2\/chapters\/1545\/revisions"}],"predecessor-version":[{"id":2622,"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/pressbooks\/v2\/chapters\/1545\/revisions\/2622"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/pressbooks\/v2\/parts\/1534"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/pressbooks\/v2\/chapters\/1545\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/wp\/v2\/media?parent=1545"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/pressbooks\/v2\/chapter-type?post=1545"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/wp\/v2\/contributor?post=1545"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/2250organizationalcommunication\/wp-json\/wp\/v2\/license?post=1545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}